The Reserve Bank of India (RBI) on Tuesday canceled the license of Jai Prakash Narayan Nagari Sahakari Bank Basmatnagar, Maharashtra in view of its current financial condition. According to RBI, this co-operative bank will be unable to make full payments to its depositors in the current circumstances.

After the cancellation of the license, the bank has been banned from ‘banking’ business. This also includes acceptance of deposits and repayment of deposits with immediate effect. RBI said in the statement that the Cooperative Commissioner and Registrar of Cooperative Societies, Maharashtra have been requested to issue an order to close this bank and appoint a liquidator.

99 percent people are entitled to get the full amount

On liquidation of a co-operative bank, each of its depositors will be entitled to receive a deposit insurance claim up to Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC). The Reserve Bank said that as per the data presented by the bank, about 99.78 percent of the depositors are entitled to get the full amount of their deposits from DICGC.

The bank has no capacity

RBI said, “Jai Prakash Narayan Nagari Sahakari Bank does not have adequate capital and earning potential. In such a situation, the bank will not be able to make full payment to its depositors. RBI canceled the license of the bank from the close of business on February 6, 2024, saying that the survival of this bank is harmful to the interests of its depositors.

The post RBI canceled the license of this bank, know what will be the impact on customers first appeared on Rightsofemployees.com.